The Chancellor of the Exchequer Philip Hammond unveiled the governments final budget five months before the countries departure from the European Union.
The chancellors budget saw income tax to be cut, tax on beer, cider and spirts to be frozen and cuts to business rates.
The announcement on the freeze of beer, cider and spirit taxes mean that there will be a saving of 2p on a pint of beer, 1p on a pint of cider and 30p on a bottle of Scotch or gin. Hammond stated that his reasoning behind the freeze was to ‘keep the cost of beer down for the patrons of the great British pub’.
However, the usual Office for Budget Responsibility will continue to increase for wine meaning the price of still wine will rise by 7p, and sparkling wine will rise by 9p. Since 2012, wine overtook beer as the largest contributor to the public purse through duty payments, and no alcoholic drink has paid more to the Treasury since then.
Wine & Spirit Trade Association chief executive Miles Beale hailed the freeze on spirits but criticised the Chancellor’s decision on wine.
He said: “We welcome the Government’s decision to freeze duty on spirits, which will support this great British sector to invest, grow and create jobs – as well as supporting the public finances through increased revenue. However, the decision by the Chancellor to increase wine rates significantly is a hammer blow to this great British industry. It actively undermines a sector that has been hardest hit since the Brexit referendum and will be thoroughly unwelcome for the 33m consumers of the nation’s most popular alcoholic drink.”
Hammond has also announced that for all retailers in England with a rateable value of £51,000 or less, their business rates bill will be cut by one third. This includes for pubs, shops, restaurants and cafes, in a bid to support councils in supporting the high street.
He estimated this would be a saving of up to £8,000 for 90% for all independent premises such as shops, pubs, restaurants and cafes.
The Chancellor also announced £675m of co-funding to create a Future High Streets Fund to support councils to draw up formal plans for the transformation of their high streets, and the £1.5 billion ‘high street rescue plan’.
UKHospiality’s chief executive has said she hopes that the Government continues its positive support during the counties withdrawal from the EU.
She said: “This was a positive Budget for hospitality, recognising and acknowledging our core campaigns. We estimate the measures announced in the Budget, as a result of our campaigns are likely to save the trade £750m.
Hospitality businesses have been devastated by spiralling business rates costs, so steps to address this are welcome. UKH has exhaustively campaigned for support for the sector on business rates, so it is positive to see the Government listening. The Chancellor has taken some positive steps to reassure and support hospitality businesses during uncertain political and economic times.”
Income tax cuts were also announced by Hammond and will cost £2.7bn within the next year. The 20% tax band, which currently starts on earnings above £11,850, will rise to £12,500 next year. The higher rate 40% tax band will begin at £50,000 from April, a jump from £46,350.